Family Leave

By | Updated Nov 9, 2016 8:50 PM UTC

In 183 countries around the world, a working mom can take time off to be with a newborn or young child — and have an income while she does so. Fathers can count on that too, in almost as many nations. On average, a couple’s combined paid leave for childbirth and child care amounts to 63 weeks. There’s one big exception — the United States, where there’s no national requirement for paid family leave. Instead there’s a hodgepodge of state and company policies that mean a family’s circumstances depend on where they live and who they work for. Overall, just 12 percent of workers have access to paid leave. Managers and professionals in large companies are most likely to be eligible, while in Silicon Valley companies scrambling to hire or hold onto scarce tech workers offer up to a year to new parents. The country's next president, Donald Trump, wants to change that — but for mothers only.

The Situation

During the campaign, Trump proposed six weeks of paid leave for mothers after his daughter, Ivanka, spoke at the Republican convention of the need to support working mothers. Trump’s Democratic rival, Hillary Clinton, proposed 12 weeks of leave with pay of at least two-thirds of a parent's current wages, for both parents. Currently, only three states, California, New Jersey and Rhode Island, require paid time off. Their programs are funded by payroll taxes paid by workers but not by their employers. Eleven other states have expanded eligibility for unpaid leave. In January, while a Democratic-sponsored national paid parental-leave bill languished in the House of Representatives, President Barack Obama granted federal workers six weeks of paid leave after the birth or adoption of a child or to care for a sick family member. The Washington D.C. City Council is considering the nation’s boldest plan. It would offer most privately employed workers up to 16 paid weeks of family leave, funded by a tax on businesses. Globally, few countries have cut back on paid leave, even during the recent economic downturn; the trend instead is toward expansion, especially of paternity leave.

 

The Background

Paid maternity leave became the norm in Europe and other industrialized nations in the 1970s as more women entered the workforce. In most countries, it’s funded by taxes and considered an extension of social security programs. In others, the law requires that businesses cover the cost directly or share it with the government. In 1984, U.S. women’s rights activists helped draft The Family and Medical Leave Act to require companies to offer an unpaid program for men and women covering a range of family issues. It was resisted by businesses before passing in 1993. The law contains many exemptions — it doesn’t apply to firms with fewer than 50 employees and mandates that employees must work for a company for at least 1,250 hours in the previous year to be eligible. As a result, 43 percent of private-sector workers fail to qualify, and many low-wage workers who could take unpaid leave feel they can’t afford to. Paid leave is far scarcer: In 2012, only 15 percent of workers in medium and large companies, 8 percent of small business employees and 4 percent of part-time workers had that option. And 23 percent of women who did take leave were back at work within two weeks of giving birth.

 

The Argument

Trump’s plan was praised by some child-welfare advocates but criticized by others. They said it could unintentionally set back gender parity in the workforce by discouraging employers from hiring women. It might also clash with the the gender neutrality of the Family and Medical Leave Act. More broadly, the debate over family leave in the U.S. has centered around the long-term health and economic benefits of time off with a new child or to care for a parent versus the financial burden on companies. As states and cities have discussed action, some business groups in those places have argued that a paid-leave mandate would give an edge to competitors elsewhere. Supporters of paid leave say it could help the economy by reversing a slump in American women’s labor force participation rate, which has fallen to 63 percent, just below Japan. Studies in California and New Jersey found that most businesses reported no negative impact from their paid leave programs and researchers said they cut worker turnover.  Polls show support for the idea from a majority of voters in both parties.

The Reference Shelf

  • A Bloomberg Businessweek op-ed makes the case that paid family leave is good for business. An Albany Business Review article examines the arguments made against it.
  • An Atlantic article on the paid family leave arms race in Silicon Valley.
  • A survey by the Institute for Women’s Policy Research of papers on paid parental leave from the perspectives of individuals, families and employers.
  • A study by the U.S. Department of Labor of how employees who are eligible for time off under the Family and Medical Leave Act take advantage of it, or don’t.
  • An Organization for Economic Cooperation and Development survey shows how family leave policies in the U.S. stack up against other industrialized nations.
  • An OECD comparison of the female labor force participation rate across countries.

 

First published Oct. 23, 2015

To contact the writer of this QuickTake:
Jennifer Oldham in Denver at joldham1@bloomberg.net

To contact the editor responsible for this QuickTake:
John O'Neil at joneil18@bloomberg.net